Crypto Market Sees Significant Liquidations as Risk of Second Squeeze Remains

The recent surge in Bitcoin prices has led to a significant liquidation of short positions, with over $427 million cleared in a single session. This comes as the market was already under pressure from bearish positioning that had accumulated over 46 days of negative funding.

Despite this, the risk of a second squeeze remains high due to deeply negative funding rates, which are currently sitting at minus 4.2 percent APR. This means that shorts that rebuilt positions after the initial cascade face the same carry cost and directional risk as before.

The Iran peace catalyst has been cited as one of the key factors contributing to Bitcoin's surge, with the ceasefire extending to 10 days and other constructive catalysts also playing a role. Institutional inflows have also been strong, with $1.1 billion weekly investments providing further support to the market.